Why You Need a Medical Coding Audit and Its Benefits

 The administration of healthcare information and overall quality of care depend on accurate medical coding. Internal and external medical coding audits ensure that healthcare organizations have the right policies and practices in place to provide high-quality medical coding.

Inaccuracy problems, such as out-of-date codes or even fraudulent billing, can be found by routine audits. These audits offer a quality control procedure that aids in the correct reimbursement of companies and the maintenance of regulatory compliance. To assist enterprises seeking better accuracy and accountability, we put together this information on the significance of medical coding audits and how they may enhance medical coding accuracy.

Reasons to Perform a Medical Coding Audit

Medical coding audits are necessary now that most healthcare institutions have formalized compliance systems. Not checking medical codes exposes businesses to compliance risk and financial loss. Regular auditing reveals existing issues and gives healthcare businesses the knowledge they need to enhance coding rules and practices.

Learn about problematic trends

Several of the typical problems that medical code compliance audit services might identify are as follows:

• Under- and up-coding: These are incorrect depictions of the services provided. Up-coding specifies more costly operations than are really carried out, and under-coding uses a code for less-priced services than are actually provided.

• Unbundling is the practice of using numerous CPT (current procedural terminology) codes for an operation when only one would be required. This could happen as a straightforward error. It's possible that the latest ICD-10 codes aren't being used by the coders, or up-coding may be done on purpose.

• Outdated coding: Medical coders must be familiar with a number of different sets of codes, including the HCPCS (Healthcare Common Procedure Coding System) from the Centers for Medicare and Medicaid Services and the ICD (international classification of illnesses) from the World Health Organization. These code sets are generally updated once a year. Using out-of-date code can cost you money.

• Lack of documentation: Medical coders can only utilize the documentation provided to them, hence this limits their ability to accurately code medical records. Medical coding will be incorrect if the practitioner produces paperwork that is absent or illegible.

Medical Coding Audits' Advantages

So now you know what is at risk when healthcare businesses don't commit to routine audits of medical coding, including compliance risk and wasted money. It's also critical to comprehend the precise benefits that proper medical coding and audits provide for healthcare firms.

1. Upgrading Compliance and Cutting Down on Fraud

In the healthcare sector, compliance and billing fraud is a significant problem. Medical Economics estimates that in 2016, Medicare's fee-for-service inappropriate payment rate—which counts payments that don't follow the rules for coding and billing—was 11%, or $40.4 billion. These erroneous payments are the consequence of either invoicing mistakes or fraud. 301 medical practitioners were accused of defrauding Medicare of $900 million in 2016 by the Medicare Fraud Strike Force.

According to Medical Economics, the following are the main reasons for incorrect billing:

• Lack of paperwork is responsible for 64% of incorrect Medicare payments.

• Absolutely no documentation

• absence of a medical need

• erroneous coding

The most frequent types of fraud include up-coding, paying for extraneous treatments, providing services that weren't needed, and scheduling appointments that patients didn't show up for.

Medical coding audits might reveal fraudulent or inadvertent billing practices. Healthcare businesses should improve their billing procedures and employee training to prevent additional billing errors and purposeful fraud, therefore lowering risk and perhaps sparing themselves from being hit with costly fines.

2. Enhancing Precision

According to the results of the Central Learning 2nd National ICD-10 Coding Contest, medical coding accuracy generally falls short of the required level of 95% accuracy. For instance, inpatient patients as a whole had an average coding accuracy of 55% in 2016. In 2017, that percentage rose to 61% accuracy. For ambulatory surgery and the emergency room, coding accuracy was considerably worse.

For your patient records, overall care quality, and compliance reasons, accurate medical coding is crucial. For instance, risk adjustment and quality reporting in healthcare organizations are impacted by the accuracy of medical coding.

Medical coding audits can spot problems including inadequate documentation that degrade coding quality. Medical coders' ability to do their duties is hampered by inadequate documentation, which impacts patient records. Additionally, when the specifications for value-based compensation change, proper coding for quality reporting becomes even more crucial.

3. Keeping the Profit Line Safe

The loss of money from inaccurate coding affects healthcare companies. Claims that are refused or rejected can be a result of inaccurate coding. A claim is deemed refused when a payer examines and processes it only to determine that it is not payable. 

This could happen as a result of coding problems that were discovered after processing or because the claim violates the provider-payer agreement. Due to numerous mistakes, rejected claims seldom even get to the payer review stage. It will take time to fix the mistakes and resubmit the claim if it is rejected or denied in order to get paid.

In some instances, claims with incorrect coding will pass the payer procedure. Claims with inadequate coding result in lost revenue, whereas claims with excessive coding expose healthcare companies to legal penalties.

Medical coding audits will identify locations where wasted money is generated throughout the coding process. Following that, healthcare institutions might modify their coding procedures to prevent further harm to the bottom line.

4. Providing coding training

One of the most important advantages of medical coding audits is coder education. Healthcare firms may lower the risk of fraud and lost income by investing in the education of its coders to prevent future errors that result in compliance. Here are some pointers for instructing medical coders using audit results:

• Educate medical coders about audits: Use audits as a chance to start a discussion about medical coding education. Make it very apparent that an audit, whether internal or external, is not intended to invalidate anyone's work but rather to provide an opportunity for team improvement.

• Create coding quality standards: The findings of an audit might be utilized to create new standards in the future. These standards may be developed with the cooperation of coders, who can also help hold one another accountable for meeting them.

• Provide reliable resources Inconsistent teaching might be blamed for inaccurate coding. Are all parties utilizing the same tools to do the task? Make a list of trustworthy websites that medical coders can rely on and use, such as the American Medical Association and the CMS websites.

• Make communication a priority: Discuss the findings of an audit. What are they saying? How may they be improved upon? Don't stop there, either. Encourage programmers to interact with one another and ask questions. Keep a record of the responses to frequently asked queries to assist in integrating new programmers.

• Commit to continuing your education: Medical coding standards and laws are always changing, thus education programs should be created to keep up. Regularly schedule instructional events for the team to maintain the organization's coding procedure up to date, effective, and correct.